This article was updated at 10:15 AM EDT, April 6, 2018
Famously discreet special counsel Robert Mueller, as he shows interest in the connections between Russia’s government and Donald Trump, often leaves clues behind for those trying to follow him, rather like a hunter blazing a trail—or perhaps like the boy who recently fell into the Los Angeles sewer system. They’re not obvious, just a handprint here or there, but they’re right in front of anyone who cares to look.
One of the most tantalizing of those clues may appear in Mueller’s memorandum to the court prior to the sentencing Tuesday of Alex van der Zwaan, a 33-year-old Dutch lawyer who pleaded guilty in February to charges that he lied to Mueller’s investigators. In the March 27 memo, Mueller sketched reasons for van der Zwaan to do at least a little jail time, citing a “scarcity of mitigating factors and several aggravating circumstances” (PDF).
On its face, the interest in van der Zwaan relates to his work with former Trump campaign managers Paul Manafort and Rick Gates in Ukraine. Van der Zwaan doubtless knows a lot about what the two were up to there, including their allegedly extensive illicit financial dealings and connections with a former agent of Russian military intelligence, the GRU, referred to as “Person A” in Mueller’s memorandum. It’s van der Zwaan’s lies about that latter connection, along with his refusal to cooperate with prosecutors, that landed him with a 30-day sentence.
But the Mueller team may have had another purpose in going after van der Zwaan: He is the son-in-law of Russian oligarch German Khan, a member of the powerful Russian Alfa Group consortium, about which many sensational allegations have been made over the years, some of them of great potential interest to the Mueller investigation looking at possible complicity between the Trump campaign and the Kremlin.
Khan and the other Alfa principals were noticeably absent from the list of Russians and Russian entities sanctioned by the U.S. Treasury on Friday. But that does not mean that they are off Mueller's radar, and at least one of their longtime associates is on the list.
Ilya Zaslavskiy, head of research at the Free Russia Foundation, noted that Mueller would have “multiple reasons” for a close look at the group, including its mention in the Steele dossier and the allegations (which Alfa denied) that it had secret internet communications with the Trump organization during the presidential campaign.
Mueller makes a direct reference to Khan in the van der Zwaan sentencing memorandum which, by itself, just might suggest Khan has caught his eye: “Van der Zwaan is a person of ample financial means—both personally and through his father-in-law, a prominent Russian oligarch, who has paid substantial sums to the defendant and his wife [that is, Khan’s daughter]. He [van der Zwaan] can pay any fine imposed.”
But the handprint on the sewer wall could be the court document cited as a reference for this statement, which actually has nothing to do directly with van der Zwaan, or with German Khan’s personal payments to his daughter and his son-in-law. The document (PDF) is in fact the complaint filed by Khan and his partners in the Alfa Group, fellow oligarchs Mikhail Fridman and Petr Aven, against Glenn Simpson and his company, Fusion GPS, for commissioning and disseminating the so-called Trump Dossier compiled by former British intelligence officer Christopher Steele.
The lawyers for van der Zwaan were wise to this ploy, with one telling the judge: “Frankly, I was stunned to see the gratuitous reference to his father-in-law in their papers as an oligarch, as if that has some bearing, or what their characterization is has some bearing on Mr. van der Zwaan. And a cite to a civil case involving his father-in-law; another gratuitous citation involving his father-in-law, a case that has nothing whatsoever to do with Alex.”
The judge responded, “I have no intention of sentencing his father-in-law.”
But Mueller would seem to be much more interested.
One of the 17 memos in “The Dossier” (not the one about urinating sex workers in the Moscow Ritz Carlton) makes allegations about the Alfa Group and its principals that could be of great interest to Mueller. But Mueller is careful to make no reference of his own to Steele’s handiwork. The alleged Justice Department reliance on “The Dossier,” or not, was the focus of dueling memos by the contentious members of the House Intelligence Committee a few weeks ago. No need to open that fetid debate again.
By citing the Alfa Group complaint, filed last October, Mueller lets the lawyers for Khan, Aven, and Fridman tell you what was alleged against them, which they say repeatedly is false and defamatory. Indeed, they claim “the Plaintiffs and Alfa are collateral damage in a U.S. political operation… that has nothing do with the the Plaintiffs.”
Steele’s memo labeled “Company Intelligence Report” or CIR 112, according to the Alfa complaint against Simpson, “specifically discusses the Plaintiffs. Its title, by itself, is defamatory: ‘RUSSIA/US PRESIDENTIAL ELECTION: KREMIN-ALPHA [sic] GROUP CO-OPERATION.’ CIR 112 suggests that Alfa and its executives, including the Plaintiffs, ‘cooperated’ in an alleged Kremlin-orchestrated campaign to interfere in the 2016 U.S. presidential election.”
The Alfa complaint goes on to cite CIR 112 alleging the “‘current closeness’ of an ‘Alpha Group/PUTIN relationship,’ including that ‘[s]ignificant favors continue to be done in both directions’ and that ‘FRIDMAN and AVEN [are] still giving informal advice to PUTIN, especially on the US.’”
The Dossier, as cited in the Alfa complaint, then went on to allege that in the 1990s a former employee of the group who now works closely with Putin got his start by delivering “large amounts of illicit cash to the Russian president, at that time deputy Mayor of St. Petersburg” and by 2016 was serving as an intermediary between Alfa and Putin.
“The allegations are false,” says the Alfa complaint. “And their defamatory nature is clear: CIR 112 alleges that, in the 1990s, Alfa (a member of ‘Alpha Group’) and three of its largest beneficial owners purportedly engaged in actions of criminal bribery of Vladimir Putin, a public official, to secure favorable business treatment.”
In fact, the alleged purveyor of cash to Putin, Oleg Govorun, did not join Alfa officially until after Putin left the St. Petersburg mayor’s office. But, interestingly, Govorun, currently head of Putin's directorate for social and economic cooperation with the Commonwealth of Independent States, is on the new sanctions list from the Treasury.
Why would Mueller include a reference to the complaint against Fusion GPS in the van der Zwaan sentencing memo?
Khan, who ranked number 11 on the 2017 Forbes list of Russian billionaires, makes an interesting contrast with the bookish, wholesome-looking van der Zwaan, who, according to his lawyers, is desperate to get home to his pregnant wife in Britain. A 2008 U.S. embassy memo from Moscow published by WikiLeaks provided a description of Khan, known as one of Russia’s most ruthless businessmen, by a British oil executive named Tim Summers, who went on a hunting trip with him:
“Khan had shown up for the trip with not just his girl friend (Khan is married) but also with six prostitutes. They had flown out to Khan’s hunting lodge, which Summers said was like a Four Seasons hotel in the middle of nowhere. At dinner that evening, Khan had told a stunned Summers that The Godfather was his favorite movie, that he watched it every few months, and that he considered it a ‘manual for life.’ Khan had also come to dinner armed with a chrome-plated pistol.”
Khan and Mikhail Fridman, both originally from Ukraine, created the Alfa Group in 1989, along with Alexei Kuzmichev, and were later joined by Petr Aven. The group included Alfa Bank, one of the largest private banks in Russia with branches worldwide, a 50 percent stake in the oil giant TNK-BP and Alfa-Eko, which exported oil and was headed by Khan. According to a report from the research firm Stratfor in 2007, available on WikiLeaks, Aven was known to be an especially close personal friend of Rosneft chief Igor Sechin, a key Putin ally (PDF).
And the Alfa Group and Sechin have worked closely in the oil business. In 2013, Rosneft purchased Alfa’s stake in TNK-BP for $27.7 billion, and Alfa invested the proceeds in a new consortium, LetterOne, an international investment business, focusing on energy, technology, and health.
Despite their well-established ties to Putin—Aven’s friendship with Putin, as he openly acknowledges, goes back to the early 1990s—the Alfa Group billionaires have thus far avoided Western sanctions by maintaining a careful balance between meeting Kremlin requirements and maintaining a favorable public image in the West. Alfa Bank notably pulled out of Crimea after Russia’s 2014 annexation of the region, which it publicly opposed, and it was the only large Russian bank to be exempted from sanctions.
When asked at a 2015 congressional hearing whether Fridman was a potential target for U.S. sanctions, U.S. Assistant Secretary of State Victoria Nuland emphasized that the measures were aimed at “Russian public government assets and entities. Mr. Fridman runs one of the few remaining private companies in Russia, and, as such, has had his own strong views as a private citizen about appropriate Russian-European relations.”
The Alfa Group has huge business interests around the world and runs an ambitious PR campaign to bolster its directors’ images as philanthropists and friends of the West. During the period 2004-2015, Alfa Bank reportedly paid the U.S. lobbying firm BGR close to $6 million to lobby on behalf of “bilateral US-Russian relations.” Aven, for one, received an award for corporate citizenship in 2015 from the Kennan Institute of the Wilson Center, which sponsors research on Russia. (That same year Putin bestowed a Kremlin award on Aven.) Aven also is a major funder and board member of Moscow’s New Economic School, which hosts many Western scholars. Aven’s daughter and son both attended Yale, as did Fridman’s daughter.
But the Alfa Group allegedly has a dark side, some of which emerged here in the United States during a civil suit filed by Fridman, Aven, and Alfa Bank in 2000 against the Center for Public Integrity, which had published a piece about the Alfa Group that they claimed was defamatory. The piece in question discussed allegations of organized crime and drug activities involving the group that had been made public in Russia. In a September 2005 opinion in favor of the defendants, Judge John Bates, citing reams of media articles about Alfa, as well as a Russian state security (FSB) report on the group, observed: “Aven and Fridman have been dogged by allegations of corruption and illegal conduct. Russian newspapers have published repeated claims that Aven and Fridman have rigged the auction of state assets through government connections, threatened the lives of government officials, ordered the assassination of a mobster and engaged in narcotics trafficking and money laundering.”
Although the allegations mentioned in 2005 decision were repeatedly and vehemently denied, it’s easy to see what Mueller would be interested in whether there’s any fire behind all that smoke.
It’s also of interest that after Manafort and Gates emerged to run the Trump campaign in March 2016, further connections to the Alfa Group’s shadowy influence crept in. On April 27, Richard Burt, a former U.S. ambassador to Germany, helped to craft Trump’s first major foreign policy speech. At the time Burt was a nonexecutive director of the Alfa Group’s LetterOne and a member of its 10-person supervisory board. In May 2010 and May 2011, Burt had accompanied Mikhail Fridman on a visit to the White House. And Burt’s lobbying firm, McLarty Associates, was hired in 2016 by LetterOne to promote the group’s business interests, in particular, its plans to get into the U.S. health care industry. Trump’s conciliatory tone toward Russia in his speech was evident: “I believe an easing of tensions and improved relations with Russia… Common sense says this cycle of hostility must end.”
With additional reporting by Christopher Dickey